Many companies in a variety of sectors would benefit from the Inflation Reduction Act funding, but both Bank of America and Morgan Stanley believe one name stands out: NextEra Energy. “We see NEE as the best-positioned company in our universe to capitalize on the benefits the bill offers,” Bank of America said Tuesday in a note to clients, adding: increased his stock target from $87 to $94. Morgan Stanley, meanwhile, upgraded the company to an excess rating on Tuesday, calling it “one of the biggest beneficiaries of the Inflation Reduction Act.” The company also raised its target on the stock from $94 to $99. Shares of NextEra rose 2.6% to close at $87.37 on Tuesday. The Florida-based company is a major developer of renewable energy, including wind and solar, which means the company will benefit from hundreds of billions of dollars in the Energy Inflation Act. clean quantity. The grant, the largest climate package in U.S. history, is intended to encourage renewable energy production while promoting the growth of domestic supply chains for critical raw materials. Morgan Stanley analysts, led by David Arcaro, say NextEra’s share price is reflecting nine-year renewables growth, while the company sees “further significant value further.” Arcaro added that the company’s price-to-earnings ratio is below its previous high and that the company’s “unprecedentedly strong renewables landscape deserves the expanded premium.” Bank of America echoed this view, saying the stock is not trading high enough relative to its peers. According to FactSet, the stock currently trades at 29 times forward earnings. “We see an opportunity for NEE to accelerate C&I [commercial and industrial] Company analysts led by Julien Dumoulin-Smith say companies’ efforts won’t wait to take advantage of lower-cost renewable energy than in an environment of rising electricity prices. The company’s stock was flat last month and down 6% for 2022, he added. – CNBC’s Michael Bloom contributed report.
